Buy MindTree, target Rs 1225: Motilal Oswal

Motilal Oswal has a buy call on MindTree Ltd. with a target price of Rs 1225.0 . The current market price of MindTree Ltd. is Rs 955.5 Time period given by the brokerage is a year when MindTree Ltd. price can reach defined target. MindTree Ltd., incorporated in 1999, is a largecap company with a market cap of Rs 16023.08 crore.

Investment rationale by Motilal Oswal
We expect MTCL to grow its USD revenue/EPS at a CAGR of 17/37% over FY18-20. The stock trades at 23/17x FY19/20E EPS on our revised earnings. MTCL’s strong revenue momentum, in our view, will also help its margins in the quarters to come. As a result, we have increased our price target to INR1,225, which discounts forward earnings by 19x. Peers such as MPHL, HEXW and LTI continue trading in the range of 17-21x FY20E earnings. Maintain Buy.